Retirees are looking to invest in buy to let property to boost their income in retirement.
Research from retirement income and equity release specialist Retirement Advantage has found that more than one in ten people over 50 are looking to purchase a buy to let investment property when they retire.
Should this come to pass it would mean 1.3 million new retirees would become landlords.
Half of these potential new buy to let investors said that they were drawn to the combination of potential capital growth and regular income, whilst 44 per cent said it would boost their retirement income.
Over 30 per cent thought that buy to let investment was a safer bet than investing on the stock market, while a similar number expected it to bring better returns than pension investment or savings accounts.
22 per cent of the potential landlords had already had successful experience of buy to let investment, and 18 per cent expected to enjoy property management.
The attraction towards buy to let investment among the over 50s is despite new tax rules that are making it more difficult for investors to make money from property, including higher rates of capital gains tax and stamp duty for landlords.
Andrew Tully, pensions technical director at Retirement Advantage, commented: ‘There are a number of things to consider before embarking on a career as a landlord. First and foremost, a pension is designed to provide an income in retirement, which is usually done either through drawdown or an annuity. People will need to think long and hard before withdrawing significant sums of cash from their pension as any withdrawal over the first 25 per cent is subject to income tax.
He added: ‘If your main priority is to generate an income then the rental yield from the property may not provide the income you expect. Don’t forget you will also have to manage the property, or pay someone to do so on your behalf.’